There is a verse in the Christian Bible that says, “faith without works is dead.” It is talking to people that say they are Christians but show no evidence of that identity. The background of the statement is the assumption that being (or becoming) a Christian is reflected in visible changes in a person’s outlook, attitudes and actions. Orthodox Christianity does not endorse wishy-washy faith any more than it canonizes competing worldviews. (Presumably, other faiths hold similarly strong views of what is right and wrong for their adherents. )

What should be expected of an “orthodox” competitive intelligence professional? Should they be in the prediction business?

Some will tell you that predictions have no place in competitive intelligence. Competitive intelligence professionals should limit themselves to analysis of what has happened. When talking about the future, the most that should be done is to delimit possibilities and probabilities. That equips others (e.g., senior management) to make the critical decisions that are required for the business.

There are two big reasons for this opinion. Some believe that it is simply inappropriate for competitive intelligence to move beyond a support role into advocacy. What gives a competitive intelligence professional the right (or the knowledge) to presume a decision-making capability? Another reason is that it is difficult to predict anything accurately. In fact, there is a wish fulfillment for failure when one attempts future gazing. Thus, it is appropriate, safe and expected to refrain from predictions except those couched carefully as scenarios, risk assessments and options.

Poppycock.

Predictions are essential for effective competitive intelligence. Without them, competitive intelligence is “dead.”

No competitive intelligence professional is worth their salt (in the long term) if they take timid stances about what might happen or are unwilling to share this directly with their customer or client. Obviously, the past cannot be changed (admittedly, explaining the past or present can be illuminating for many). Thus, the greatest impact for effective competitive intelligence is improving the likelihood of more positive future outcomes for the client or company. How can this be done if competitive intelligence professionals shy away from making testable statements about the future? It cannot. Hence, in my opinion, effective competitive intelligence must lead to predictions about what will happen and how to exploit the likely future states.

There are some “prediction” caveats to respect.

First, predictions are vitally important because they reflect thinking. Or, at least, they should reflect rigorous thinking about an important subject. When this is true, the prediction statement becomes a proxy for that thoughtful analysis. A customer or client “tests” the prediction by examining the thinking and assigning a risk that reflects the measure of agreement with the prediction. Certainly, competitive intelligence professionals may assign their own risk value to the prediction. However, this is far less important than the decision-maker’s assigned value.

Second, there are predictions and there are “predictions.” Some people count as predictions only those precise, measurable statements of fact. For instance, a good prediction might be, “Competitor X will introduce a competing product with certain features for a specific market segment in the third quarter of 2010.” If a company believed that prediction (with the detailed filled in), they could prepare an effective counter attack. This is an actionable, factually testable prediction. Continually monitoring evidence might increase (or decrease) confidence in the prediction as new information was gathered. This is the most common type of competitive intelligence prediction and is highly useful.

Other predictions are not actionable as stated. For instance, extrapolating a broad demographic trend is a prediction but usually is too general to merit specific company action. The challenge for futurists is interpreting broad trends for specific understandings leading to possible actions for near term business.

During my MBA studies, I had a professor that I thought was crazy. He was always spouting off about what a company was going to do or the inevitable (to him) changes in the market. He felt no trepidation about being wrong or controversial. Indeed, he seemed to revel in the stimulating conversations about his predictions. I remember arguing with him for the fun of it just to show him the holes in his analysis. He had a lot of nerve to say that we should always make predictions especially when so many of his were wrong.

Later, with a little accumulated wisdom, I realized that making predictions forces someone to take and defend a stand. Exposed thinking is thinking that improves over time. Conversely, hidden or wishy-washy thinking inhibits learning. Rather than embarrassment, his approach guaranteed engagement among interested people. This is a great value in competitive intelligence.

It is less important for our predictions to be believed without question (I have never experienced such belief) than for the same predictions to represent thoughtful analysis and conviction that can be tested through discussion and debate.

Competitive intelligence is “alive” when it does the following three things.

It addresses an issue of strategic significance to the customer or client.

It gathers, organizes and interprets information from the competitive environment affecting that strategic issue.

It offers a prediction derived from that competitive analysis that stimulates, informs and equips the customer to make a meaningful decision.

6 comments until now

The analogy of the weatherman is comparable. What use would the flashing radar with brightly colored regions be without the weatherman interpreting the lightning strikes, the sections of heavy rain, the path the storm is taking, and the likelihood of damaging conditions along the pathway? Are you in a low lying area where flooding is likely?

CI requires a careful review of the evidence, the meaning of the indicators, the course of likely events, and if possible for the particular client, an interpretation of specific risk and/or alternative actions for consideration.

I would add a point #4, which I was forced to do by my management: make recommendations about what management should do. This made me uncomfortable since it was politically fraught. However, it made me more thoughtful about clearly expressing my interpretations and predictions. I made plenty of mistakes and this 4th step made me stick my neck out further that I liked as I felt that CI was more of a support role than an active one!

Nice addition. I have had the same experience and agree that it is a sensitive request (order?). Nevertheless, I think that it can be an important discipline, especially for more senior CI professionals. It forces CI to demonstrate good awareness of the issues faced by management while proposing something that was defensible to them.

To your point that “The challenge for futurists is interpreting broad trends for specific understandings leading to possible actions for near term business”: one way to better inform broad demographic trends is to explore them on a finer level by understanding motivators and behaviors among the target audience groups. While this type of exploration can get expensive, it is not necessarily so, and the value of the exercise can quickly provide a measurable results and enhance the gathering of competitive intelligence.